Chinese refineries expected to increase Iranian oil imports

Chinese independent refineries are expected to increase their purchases of Iranian crude oil starting in August. This shift comes as oil reserves in Shandong, a major hub for these refineries, fell to an eight-month low of approximately 360 million barrels at the end of July, following a decline of about 35 million barrels during the month.

During recent Middle East conflicts, these refineries had largely relied on existing reserves and limited imports due to surging international crude prices and an informal Chinese policy to reduce imports. However, China's total crude oil imports recovered in July, averaging 8.45 million barrels per day, a 22% increase from June.

Millions of barrels of Iranian crude have already left the Strait of Hormuz and are prepared for transport to Asia. China's ability to utilize its significant commercial and strategic reserves, estimated at over 1.3 billion barrels, has played a role in stabilizing global oil prices despite regional instability.